Question

In chicago's southside (and other places), auto mechanics (who work outside the formal sector, without a business license, advertising, or even a garage) will do work for gang members without charging them. in exchange, gang members chase away other mechanics who wish to operate in the area. these auto mechanics have monopoly power; what type of source does it come from? economies of scale hard to duplicate inputs innovation barriers to entry

Answer 1

the auto mechanics who are protected by the gangs are taking advantage of the barriers to entry that prevent competition. These barriers are controlled by the gangs and serve as a form of payment to the auto mechanics in the area